Microsoft Corporation Slips After Swinging To Net Loss

Apple MicrosoftSatya Nadella by n.bhupinder on 2014-07-10 23:09:07

Microsoft released its fourth fiscal quarter earnings after closing bell tonight, posting adjusted earnings of 62 cents per share on revenue of $22.18 billion. Analysts had been expecting the company to post non-GAAP earnings of 58 cents per share and revenue of $22.05 billion.

They had been gradually reducing their estimates for adjusted earnings, pushing them down from 63 cents per share four months ago. In the same quarter last year, Microsoft posted earnings of 55 cents per share and revenue of $23.38 billion.

Key metrics from Microsoft’s earnings report

Microsoft swung to a net loss of 40 cents per share as a result of the $7.6 billion write-down it took on the $8 billion acquisition of Nokia’s devices division last year. The software giant also took a restructuring charge of $780 million, which it previously warned would be between $750 million and $850 million due to job cuts in connection with the acquisition.

Additionally, Microsoft recorded a $160 million charge in connection with the restructuring plan that was previously set before the Nokia acquisition. In all, the charges had a negative impact of $1.02 per share. In last year’s fourth fiscal quarter, Microsoft posted net earnings of 55 cents per share.

Microsoft’s sales by segment

Commercial revenue was $13.5 billion, compared to the consensus estimate of $13.63 billion. The annual run rate for commercial cloud annualized revenue has surpassed $8 billion. Commercial Cloud revenue climbed 88% driven by Office 365, Dynammics CRM Online and Azure.

Also the Computing and Gaming Hardware division, which includes the Surface tablet and the Xbox, brought in almost $2 billion in revenue. Server Products and Services recorded a 4% increase in revenue, while Dynamics revenue increased 6%. Office Commercial products and services saw a 4% decline in revenue. Windows licensing revenue fell 8%.

Windows OEM revenue declined 22% due to the falling PC market, while Surface revenue increased 117% to $888 million driven by the Surface 3 and the Surface Pro 3. Xbox revenue increased 27% thanks to consoles, Xbox Live, and first-party games. Microsoft also recorded a 21% increase in search ad revenue with Bing’s share of the U.S. market rising 110 basis points to 20.3%.

As of this writing, shares of Microsoft were down 3.72% at $45.53 per share in after-hours trades.

 

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.

2 Comments on "Microsoft Corporation Slips After Swinging To Net Loss"

  1. Microsoft has to be the poorest run large company in the world. They have a monopoly on PCs and make such a poor product that people decide to use their phones instead. It is as if a company had a monopoly on toilet paper and did so bad of a job that people decided to wear diapers. Everyone switching to phones in their own home…that is not a natural development. Anyone who says that is just clueless.

    How could a company as rich as that and with as many talented people always make software where they act like everyone is supposed to buy it. The people lord over us with a spoon full of medicine and say “We changed all this because it is good for you. Here! Drink up!

    I could direct them to make a far more satisfying and enjoyable OS, but honestly I believe they probably have dozens of people there that can too. The wrong people are leading. They need to split up in competing teams. Each team makes an OS. Users critique them. The top few get chosen and the user gets the choice. Losing teams get torn asunder. Leaders are fired. The rest of that design team the other teams can choose. You don’t get chosen, you are out on the street. The next time the surviving teams go again and a new one with random employees, and it starts again.

    Microsoft is killing AMD and Maybe Intel too. Nvidia, and the memory and motherboard makers may not be far behind.

    The best solution is actually to have the Fed break it up, which they should have done over 20 years ago. A dozen competing operating systems that are really windows under the hood, would really breath some life into PCs.

  2. Microsoft why would you build a phone that resembles BlackBerry’s?? Square cornered phone, what are you thinking??? I would offer the same deal I tried to offer BlackBerry. Allow me a executive position but in Canada as I do not wish to go to the states. If terms and condition are met I will offer you a handset design that includes a wearable, both would surpass the likes of Apple and Samsung products.

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